Geoscape 2010 Census (Versailles 101008)

Will the 2010 Census…
…Results Change the Way Businesses Market to America?

César M Melgoza
Founder & CEO, Geoscape
cmelgoza@geoscape.com
1-888-211-9353

Access the New Mainstream

Overview

• 2010 Census process and results.
• Cultural diversity—America’s growth engine.
• American Marketscape DataStream: 2010 Series.
• Re-thinking Corporate Diversity.
• Aligning the organization behind the opportunity.
• Will corporate America embrace the Hispanic surge?

© Copyright Geoscape, www.geoscape.com, 1 (888) 211-9353. 2

Geoscape Background

• Geoscape International founded in ’95
• Geoscape Latin America ‘95 – ’01
• Geoscape Europe BV founded in ’02
– Regional headquarters in Amsterdam
• Geoscape Intelligence System launched ‘04
• Merged ownership with Goldman Sachs June ’07
• Worldwide headquarters in Miami


Geoscape® Provides
Actionable intelligence fueled by unique data, technology and experience
— accelerating growth in a culturally-diverse business environment.

Data Resources
• AMDS Geo-demographics • HomeBase - Consumer Lists
• CSDx Spending Potential • BizBase - Business Lists
• BehaviorBase • MediaBase
– Healthcare
– Auto Insurance
– The Media Audit
– Mediamark
Technology Research Analytics
• Geoscape Intelligence System Actionable • Ground-Truth™ Segmentation
• Retail Trade Distribution
• DirecTarget® SDK Intelligence • Customer Data Enrichment
for a culturally- • Descriptive Customer Profiles
• Predictive Modeling
diverse business • Sampling Design
environment • Quantitative Surveys
• Qualitative Focus Groups
• Conjoint Trade-off Modeling

Solutions Consulting
• Combined Deliverables • Strategic Planning
• Custom Databases • Opportunity Assessment
• Integrated Systems • Business Planning Support 4

The 2010 Census
Process and Results

Census 101 (A)

• The decennial census is mandated by the American constitution.
– It’s primary intent is to enumerate residents for apportioning the U.S. House of Representatives.
– A secondary purpose is to enable the “equitable distribution” of funding to state and local governments.
– A tertiary purpose is to support the development of commercial activity through information sharing.
– It is administered by the U.S. Department of Commerce, Bureau of the Census.

• For 2010, the decennial census included only the “short-form”
– Collects basic facts of households and the individuals within them plus “group quarters” populations.
– The “long-form” was previously a 16% sample co-incident with the decennial census and used to collect a
number of additional data elements, such as language-use, educational, income, and housing.

• The American Community Survey (ACS) replaced the long-form
– Ongoing survey that provides data every year -- giving communities the current information they need to
plan investments and services.
– Is administered each year to approximately 2 million households and the 2009 county level data became
available last week.


Census 101 (B)

• The Census Bureau is funded completely by tax payers to the tune
of $15 billion for 2010.
– $340 million was dedicated to Census 2010 community outreach, advertising and marketing.

• Among the most salient issues with the census are:
– Representation of economically disadvantaged groups such as ethnic minorities and recent immigrant
populations.
• Who are often reluctant to respond due to either their transient nature or their fear of persecution.

• The Census is still challenged to reach ‘hard-to-count’ population
segments like Un-acculturated Latinos.
– In 2000 Census, it is believed that the Latino under-count was about 0.7% fewer than were counted,
which was 35.3 plus 250k or 37.5 million.
– Congress prohibited census from using estimation probability statistics to adjust the under-count.
– Some believe the under-count was more severe…transient populations more likely missed as well as
those who purposefully over-stay their tourist visa term.


Census vs. ACS
• Decennial full measurement of • Ongoing monthly sample each ~2m/year:
population within households and • Includes 48 questions.
group quarters. – All decennial census questions.
• Includes: 7 questions. – More detail on housing characteristics.
– Persons in household. – Occupation.
– Age. – Public assistance data.
– Ethnicity, Race, Country of Origin. – Educational attainment.
– Housing type and owner/renter. – Language spoken at home and English ability.
– Gender. – Place of birth and citizenship status.
– Relationships among household members. – Income, Employment, etc.


Census 2010 Timeframes
Summary of collection and deliverables

MAY-JUL
DOOR-2-DOOR FOLLOW UP FOR
NON-RESPONDERS
DEC’31-MAR ‘11 INITIAL
REDISTRICTING DATA INCLUDING
JAN ‘10 RACE AND LATINO COUNTS
GROUP QUARTERS &
HOMELESS

MAR-MAY APR ’11-JUN ’13
MAIL CENSUS FORMS TO ALL KNOWN VARIOUS MORE
HOUSEHOLDS DETAILED DATA FILES
AND REPORTS
AUG-SEP
FINAL DATA COLLECTION OF
REMAINING VOIDS


Some key Census shortcomings

• Under-count.
• Confusion over race and ethnicity terminology.
– Countries of origin under race for Asian but separately under Hispanic ethnicity.
– No option to select mestizo or mulatto as race.

• Language:
– In ACS, English ability for non-native speakers but not usage by context.

• Other issues will be seen as published and
scrutinized.


Cultural Diversity
America’s Growth Engine

American Marketscape DataStream

Multicultural population & household data – uniquely precise.
Planning Year & Five-Year forecast market data; 2010/2015, July 1st vintage date.

In-depth representation of Over 1,500 indicators on
Macro-to-micro coverage
U.S. cultural diversity various subject areas
• Employs proprietary household & individual • Identifies cultural populations missed by the
• U.S., state, Nielsen Designated Market Area level data. census
(DMA), metro area, county, congressional – Helps rectify the under-count in recent
district, ZIP code, census tract and block • Utilizes proprietary DirecTarget® Technology. immigrant groups.
group levels.
• Incorporates dozens of public and private • Includes building permit & residential build-out
source data sets including primary research data.
surveys.
• Built from the “ground-up” not the other way
• Language, Income, Socioeconomic Status
around by a team of specialized
(SES), Country of Origin, Consumer Spending,
demographers, statistical modelers & • 1990 & 2000 census data to present
Age Cohorts, Acculturation (Hispanicity™
database programmers in a perennial effort geographic areas; for time series.
and Asianicity™ segmentation), Technology
to stay at the cutting-edge of research. Adoption and many others.
• Incorporates the American Community Survey
(Census Bureau) & integrates various
government data sources.
• Features 337 detailed Consumer Spending
Dynamix™ (CSDx) indicators by major ethnicity
group, plus 15 major category and 4 summary
variables.

Basic compelling facts

• Hispanics, African Americans and Asians represent over 100 million Americans.
• There are over 50 million Hispanic steady-residents of the U.S.
• Hispanics contributed 52% of overall U.S. population growth between 2000 and 2010.
• Consumer spending growth drives the U.S. economy—Hispanics and Asians
represent a disproportionate amount of the growth into the foreseeable future.
• The White Non-Hispanic population represents a declining share of the American
consumer—and an increasingly dependent on government entitlement programs.
• Most corporations are under-invested in in-culture marketing.
• Corporations must operationalize behind the opportunity, not just marketing.
• Marketing is only part of the equation.
– In-culture operations is a critical parallel step to capitalize on the opportunity.

Hispanic Population Concentration in 1980

Gateway states
bordering Mexico.

© Copyright Geoscape, www.geoscape.com, 1 (888) 211-9353. Source: Geoscape; American Marketscape DataStream: 2010 Series; Estimates as of July 1 2010. 14

Hispanic Population Dispersion 2015

Major metro areas
outside border states are
now gateway cities too.

Arizona is the only state
to decline in Hispanic
population between
2009 & 2010.

© Copyright Geoscape, www.geoscape.com, 1 (888) 211-9353. Source: Geoscape; American Marketscape DataStream: 2010 Series; Estimates as of July 1 2010. 15

U.S. Population: 2010 by Ethnic Group
About one-third of America’s population is of either Asian, Black or Hispanic origin; however, these
proportions vary dramatically at the state and metropolitan area levels. Many companies include Puerto
Rico within their U.S. marketing efforts, with an estimated 3.99 million residents in 2010.

Non-Hispanic Other Non-Hispanic Black Non-Hispanic Asian & Pacific Islander Hispanic

12%

5%
67% 33%

16%

© Copyright Geoscape, www.geoscape.com, 1 (888) 211-9353. Source: Geoscape, American Marketscape DataStream: 2010 Series. 16

Population Change by Ethnicity/Race
By 2015, the population in the three largest ethnic groups will be more than 110.5 million and
Hispanics will represent nearly half of that population.

Hispanics became the The Non-Hispanic White population
largest “minority” group will be about equal in size to
in 2000 and have Hispanic+Black+Asian in 2050.
continued to surge.

Population 1960 1970 1980 1990 2000 2010 2015
Asian & PI* 980,337 980,337 3,500,439 6,994,034 10,410,556 14,345,690 15,920,986

Black* 18,871,831 22,580,289 26,495,025 29,284,605 33,707,230 37,536,836 39,262,964

Hispanic 2,181,409 9,589,216 14,608,673 21,898,546 35,238,481 49,804,061 55,874,883

Other 157,198,598 170,062,084 181,941,668 190,507,602 202,065,639 207,880,430 212,277,086

Total 179,232,175 203,211,926 226,545,805 248,684,787 281,421,906 309,567,017 323,335,919

Note: Population in the Commonwealth of Puerto Rico (3.99 million) is not included in Hispanic population figures.
* 2000-2010-2015 numbers for Asian and Black are for Non-Hispanic; 2010 and 2015 Estimates as of July 1.
© Copyright Geoscape, www.geoscape.com, 1 (888) 211-9353. Source: Geoscape; American Marketscape DataStream: 2010 Series and the U.S. Census Bureau. 17

Unauthorized Immigrants in the U.S.

U.S. is currently home to about 11 million
unauthorized immigrants
– Nearly 7 million are from Mexico
– Another 2.2 million come from other Latin American countries
– Majority of these immigrants are young men – aged 20 -35 years old
According to the most recent Census data
,the 2009 in-flow of new immigrants from
Mexico is the lowest seen in a over a
decade
– March 2007 -March 2009 only saw approximately 150,000 new
arrivals – roughly 41% less than the previous year
Mexico is the leading country of origin for
immigrants entering the United States
– Additionally, roughly 60% of all unauthorized immigration comes
from Mexico.
Sources 1. Department of Homeland Security, 2009
All people with steady residences are 2. Jeffrey S. Passel and D’Vera Cohn; U.S. Unauthorized Immigration Flows
Are Down Sharply Since Mid-Decade, September 2010.
represented in AMDS population estimates
regardless of legal status
– 2.2 million legal non-immigrants with student and work visas are
included in AMDS

18

Unauthorized Immigration Trend

• Overall unauthorized immigrant population declined by
nearly 1 million (7.5%) between ‘07 and ‘09.
• Decline in immigration from Mexico fell only 300 thousand
(4.3%) in the same period.


Unauthorized Immigrant Inflow

• Overall steady decrease since ‘05


Median Household Income by Culture Group

Asians top the list in terms of annual household income, due in part to both the disproportionately large number in working
age cohorts and to their higher levels of educational attainment. Hispanics are about 17 percent below the overall median.

Median HH Mean HH Aggregate HH
HHs
Income Income Income
Total 118,076,459 $53,362 $64,058 $7,563,742,076,500
Non-Hispanic White 97,277,035 $56,378 $66,439 $6,462,952,031,000
Black 14,374,862 $34,976 $46,149 $663,378,904,500
Asian & Pacific Islander 4,406,731 $69,026 $77,353 $340,872,032,000
Hispanic 13,713,851 $43,307 $53,446 $732,944,313,000
Source: Geoscape, American Marketscape DataStream: 2010 Series. 21

Hispanics and Asians drive growth

Hispanics and Asians
together comprise 15%
of households, but
contribute 67% of the
increase in consumer
spending.

Average Household Size
N-H White 2.39
N-H Black 2.58
N-H Asian 2.90
Hispanic 3.32

© Copyright Geoscape, www.geoscape.com, 1 (888) 211-9353. Source: Geoscape, American Marketscape DataStream and Consumer Spending Dynamix™: 2010. 22

Top Hispanic Consumer Spending Categories
Hispanics consume more than the average American household in many categories. Among those
over-indexing categories are Apparel and various food products consumed in the home.

Average household
spending is 100 percent and
the shown categories are
among those with above
average spending.

© Copyright Geoscape, www.geoscape.com, 1 (888) 211-9353. Source: Geoscape, American Marketscape DataStream and Consumer Spending Dynamix™: 2010. 23

Aggregate Lifetime Spending per Household
Hispanic household lifespan is 15 years longer and with more spending in some categories. Lifetime
value in many categories will be greater in absolute dollar terms.

3.5
Total Expenditures
Millions (2008 $)
3
Cumlative Household Spending

2.5

2
NH White
Black
1.5
Asian
Aggregate spending over the Hispanic
1
lifespan of a Hispanic or Asian
household is usually greater
than that of Non-Hispanic
0.5 White households

0
2008 2013 2018 2023 2028 2033 2038 2043 2048 2053 2058 2063
Median Age Life Expectance Span
Hispanic 27 83 56 Calendar Year - Life Expectancy
Asian 33 85 52
African American 30 77 47 Source: Geoscape Consumer Spending Dynamix™.
Non-Hispanic White 40 81 41

Multi-dimensional Consumer Diversity
Acculturation

Media & Shopping Behavior Socioeconomic Strata

Diversity
Multi-Dimensional
Life-Stage Country-of-Origin
Consumer Segmentation
Platform

Buying Power Psychographics

Language Use

Hispanicity is Fundamental
Hispanicity™ Segmentation is a platform for
strategic and tactical planning

• HA1: Americanizado
– English Dominant (nearly no Spanish).
– Born in US; 3rd+ generation.
– Few Hispanic cultural practices.
• HA2: Nueva Latina
– English Preferred (some Spanish).
– Born in U.S. 2nd generation.
– Some Hispanic cultural practices;
often “retro-acculturate”.
• HA3: Bi-cultural
– Bi-Lingual (equal or nearly).
– Immigrant as child or young adult.
– Many Hispanic cultural practices.
• HA4: Hispano
– Spanish Preferred (some English).
– Immigrant as adult, in U.S. 10+ years.
– Pre-dominant Hispanic cultural practices.
• HA5: Latinoamericana
– Spanish Dominant (nearly no English).
– Recent Immigrant as adult (less than 10 years ago).
– Primarily Hispanic cultural practices.
– Identify with home country more so than U.S.
Hispanic.

Hispanic Language Usage
About 60 percent of Hispanics are Bi-Lingual to some degree and
about 40 percent are dependant on either English or Spanish.

This pie shows the national
distribution, although the mix
of segments varies by region
and metropolitan area.

Code Language Segment Hispanics Age 5+ Language Segment Hispanics Age 5+ %
HL1 English Dependent 9,603,177 English Dominant 21,788,218 48.7%
HL2 Bi-Lingual English Preferred 12,185,041 Bi-Lingual 5,866,279 13.1%
HL3 Bi-Lingual English & Spanish 5,866,279 Spanish Dominant 17,047,929 38.1%
HL4 Bi-Lingual Spanish Preferred 7,963,136
HL5 Spanish Dependent 9,084,793 English Capable 35,617,633 79.7%
Total 44,702,426 Spanish Capable 35,099,249 78.5%

© Copyright Geoscape, www.geoscape.com, 1 (888) 211-9353. Source: Geoscape, American Marketscape DataStream: 2010 Series. 27

Gaining Access to Growth
…will corporate America embrace the Hispanic surge?

Strategic Execution Paradigm
BUSINESS OPPORTUNITY

CUSTOMER TOUCH
ORGANIZATIONAL POINTS
ALIGNMENT

COMPETITIVE CONTEXT


Corporate Challenges

• Internal • External
– Securing buy-in – In-culture branding
from C-suite. and promotion.
• Resources to tap – Distribution
your fare share of • Get the right product to
the growth. the right customer.
• Reflecting diversity
in corporate human
– Promotion
• Get shopper’s attention to
resources and op’s. availability and deals.
• CRM 360 contact in-
culture.
– Actionable Insights
• Expand profit margin by
increasing efficiencies.


The Ad Gap
Despite the market growth and branding power offered by in-culture marketing, total
advertising investment for 2008 reflects a giant gap in commensurate spend.

Advertising Investment
$136.8
$140

$120

$100

$80
In Billions

$60

$40

$20
$5.7
$2.4
$0
Total U.S. Hispanic African American
Spend $136.8 $5.7 $2.4
%Share 100% 4.2% 1.8%
%Pop. 100% 15.4% 12.9%

Sources: Nielsen 2009 release adjusted for 4 quarters; ahaa.org


The Op’s gap

• Great advertising is a start.
• Customer relationship management is fundamental.
– Genuine client service to accommodate (and invite) diversity of cultures is key to success
of any enterprise.

• The danger of half-commitment.
– “BizBase Segment 7734.”
• One person consults the organization on multicultural marketing.
• Little or No direct budget authority.
• Expected to evangelize and “Hispanicize” initiatives.
• Great expectations not normally great returns.
• Delaying the inevitable disappointment until appropriate resources are committed.


Repositioning Corporate Diversity

SALES

HR CSR

Diversity at the core, beginning
with product development

Recruitment for all touch-points
MKG
reflecting the customer base
Diverse human resource
strategic to long-term leadership


Multicultural Marketing Continuum

COMMUNITY
RELATIONS
CUSTOMER RELATIONSHIP
LEGAL LIABILITY MANAGEMENT
LITIGATION

CORPORATE STRATEGIC
RESPONSIBILITY ADVANTAGE

DOING WELL BY DOING
GOOD


Summary

• 2010 Census: good data, no need to wait, use AMDS.
• Cultural diversity: the engine of American economic growth.
• Most companies have not right-sized for the opportunity.
• Hispanics in particular are driving growth.
• Corporations should recognize the Hispanic opportunity and
invest appropriately in the future growth of their companies.


Will the 2010 Census…
…Results Change the Way Businesses Market to America?

For a copy of this
deck, please provide a
business card.

César M Melgoza
Founder & CEO, Geoscape
cmelgoza@geoscape.com
1-888-211-9353

Access the New Mainstream

Geoscape 2010 Census (Versailles 101008)

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